Milestone DomesticScheme - IIINewsletter for Quarter ended March 2015 AN ISO 9001:2008 CERTIFIED COMPANY

Dear Investors,

We are pleased to share with you our fund update on Milestone Domestic Scheme-III (The Fund) for the quarter January-March 2015.

The Finance Minister unveiled the Union Budget in Feb 2015 with emphasis on high economic growth, improving ease of doing business and enhancing transparency. The Reserve Bank of India (RBI) cut the repo rate further by 25 bps in March 2015 on the back of reduction in inflation levels due to a slump in global oil prices. Banks are expected to cut interest rates which could provide a fillip to the residential real estate segment.

We believe that during this year, developers will focus on clearing the built up inventory and completing ongoing projects. Overall residential sales have dropped across six cities (source: Knight Frank) and the focus on affordable housing will expand the volumes. This could lead to an increase in housing sales which is estimated to rise this year to 1.92 lakh units in India's top seven cities viz. Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Pune (source: JLL India). With business sentiment improving, commercial office demand has improved and this in turn will have a positive impact on the residential real estate sector.

During this quarter, the Fund has made three distributions aggregating to Rs 32.0 crores as income to the investors. The Fund has also made a new investment of Rs.15.0 crores in Pelican Realty Projects Pvt. Ltd. for its ongoing project ‘Belfort’ in Pondicherry.

The Fund is pleased to mention that it has partially exited from its investment with the ATS Group in a residential project at Greater Noida – ATS Dolce. The total investment in this project is Rs 98.5 crores, of which the Fund has successfully exited from its first tranche investment of Rs 65.0 crore at an IRR of 23.0%. The total proceeds of approx. Rs 74.9 crores has been distributed on 10th April 2015.

I thank you all for the continued support.

Alok AggarwalManaging Partner & CEO – Real Estate

Rs. 15.0 crores with Pelican group for its

project Belfort in Pondicherry at an assured

IRR of 22.5%

investment of Rs 65.0 crore with ATS Group

at an IRR of 23.0%

investmets in Prisha Properties (Hanging

Garden)

Portfolio updates Proposed Action

Newsletter for Quarter ended March 2015

Milestone Domestic Scheme - IIINewsletter for Quarter ended March 2015

Milestone Domestic Scheme - III

Funds Received Rs. 394.0 Crores

Final Closing Date 31st January 2012

Term 3.5 years + 1 year + 1 year

No. of Investments 9

Invested Amount Rs. 328.0 Crores

Capital Divested Rs. 80.0 Crores

Income Generated (Pre-tax) Rs. 122.7 Crores

Total Divested Amount Rs. 202.6 Crores (51%)

FUND SUMMARY AS ON MARCH 31, 2015

PORTFOLIO EXIT DETAILS AS ON MARCH 31, 2015 RS. CRORES

No. Project Location Capital Capital Income Total % Capital Invested Divested Generated Exit Divested (Pre Tax, Pre expenses)

(A) (B) (C) (B+C)

1 Hubtown, Andheri, Mumbai 73.5 - 53.7 53.7 - (Ackruti City Ltd.)

2 Richa Realtors Mulund, Mumbai 50.0 - 26.7 26.7 -

3 Land Marvel Velachery, Chennai 11.0 - 3.9 3.9 -

4 Land Marvel 2 Kotivakka, & 15.0 - 1.4 1.4 - Thaiyur, Chennai

5 Hanging Garden Hebbal, Bengaluru 30.0 - 8.5 8.5 -

6 Signature Dahisar, Mumbai 20.0 - 2.4 2.4 -

7 ATS Group Greater Noida, NCR 98.5 65.0 19.7 84.7 66.00%

8 Pelican Realty Pondicherry 15.0 - - - -

FULLY EXITED INVESTMENTS

9 Jain Heights & C.V. Raman Nagar, 15.0 15.0 6.4 21.4 100.00% Structures Pvt. Ltd. Bengaluru

Total 328.0 80.0 122.6 202.6

MILESTONE DOMESTIC SCHEME - III

Richa Realtors, Mumbai

Location Mulund, Mumbai

Partner Richa Realtors

Invested Amount Rs. 50.0 Crores

Initial Investment Date October 2011

Total Saleable Area 1,150,000 sq ft (approximately)

Expected Rate of Return 23.50% p. a. (Simple Interest)

Expected Exit Date Q3 2015

Recent Developments and Way ForwardAs per the terms of the JDA, Richa is expected to start receiving payment from Tata Housing from Q2 2015. Developer is in discussions with other financila institutions to provide exit to Milestone by way of refinancing by Q3 2015.

Transaction OverviewThe Fund has made an investment in a redevelopment project of a large housing colony on the Eastern Express Highway in Mulund (E), Mumbai. TATA Housing is developing the project as JDA partner of Richa in the project.

Hubtown, Mumbai

Location Andheri, Mumbai

Partner Hubtown Limited*

Invested Amount Rs. 73.5 Crores

Initial Investment Date March 2011

Total Saleable Area 122,523 sq ft (approximately)

Expected Rate of Return 20.00% IRR

Expected Exit Date Q4 2015

Recent Developments and Way ForwardThe developer is in final stages of discussion to sell about 25,000 - 30,000 s ft of office space at Ackruti Star and expects to receive the sale proceeds in the next quarter.The developers is aggressively pursuing sale of balance office area mortgaged to the fund.

Transaction OverviewThe Fund has invested in Hubtown Limited by way of non

convertible debentures. The Fund has mortgage of ready

commercial office property ‘Ackruti Star’ in Andheri (East) -

Mumbai, having a total area of 122,523 sq. ft.

*Previously known as Ackruti City Ltd

MILESTONE DOMESTIC SCHEME - III

Land Marvel - Kottivakkam & Thaiyur, Chennai

Location Kottivakkam & Thaiyur, Chennai

Partner Land Marvel

Investment Amount Rs. 15.0 Crores

Initial Investment Date July 2012

Total Saleable Area 14,30,000 sq ft (approximately)

Expected Rate of Return 24.00% IRR

Expected Exit Date Q4 2016

Recent Developments and Way ForwardThe project has been stalled due to delay in approvals. The fund has also initiated legal action against the Developer and recalled entire capital along with outstanding interest which is overdue. We are actively sourcing JDA proposals for the projects and have short listed and initiated discussions with few developers for the same.

Transaction Overview The Fund has invested in two residential projects at Kottivakkam and Thaiyur through subscription of debentures of the SPV developing these projects. At Thaiyur, the project will cater mainly to the mid-income group. At Kottivakkam, the project is planned as a high-rise premium residential development consisting 2/3/4 BHK units with modern amenities.

Land Marvel - Velachery, Chennai

Location Velachery, Chennai

Partner Ramaniyam Group

Invested Amount Rs. 11.0 Crores

Initial Investment Date November 2011

Total Saleable Area 180,000 sq ft (approximately)

Expected Rate of Return 22.00% IRR

Expected Exit Date Extended to Q4 2015

Recent Developments and Way ForwardThe project has been delayed on account of not obtaining road width approval. Hence, the developer has requested for extension of time for payment of interest.

Transaction Overview The Fund invested in a residential project in a joint venture with Ramaniyam Group through an SPV viz. Amarneedhi Realtors Private Limited. The SPV entered into a joint development agreement with Land Marvel Homes to develop the 1.25 acres of land with total saleable area of 180,000 sq. ft (to be shared by developer and land owner)

Location Hebbal, Bengaluru

Partner Prisha Properties

Invested Amount Rs. 30.0 Crores

Initial Investment Date February 2013

Total Saleable Area 295,000 sq ft (approximately)

Expected Rate of Return 24.00% IRR

Expected Exit Date Q2 2015 / Q3 2016

Hanging Garden - Hebbal, Bengaluru

Recent Developments and Way ForwardConstruction is progressing in full swing & has reached 6th slab. Developer has received in-principle sanction from a financial institution for part refinancing of the fund’s investment. Disbursement expected during Q2 2015

Transaction OverviewInvestment has been made by the Fund into the company, by way of Optionally Convertible Debentures. The Project is located in Hebbal, Bengaluru and comprises total saleable residential area of 295, 000 sq ft. The construction work is going on in full swing and the company has been timely servicing the coupon payments

Signature - Dahisar, Mumbai

Location Dahisar, Mumbai

Partner Chaubey Realties Pvt. Ltd. (CRPL)

Invested Amount Rs. 20.0 Crores

Initial Investment Date March 2013

Total Saleable Area 129,000 sq ft (approximately)

Expected Rate of Return 23.00% IRR

Expected Exit Date Q2 2016

Recent Developments and Way Forward

Construction of the free sale tower has reached the 5th podium level.

For the rehab building, the Company expects to provide part possession by August 2015 after construction of boundary to demarcate the project site into rehab and sale portions.

Transaction OverviewThe Fund has invested in CRPL through subscription of optionally convertible debentures for a period of 36 months. The Fund has invested in a residential project–Signature, located in Dahisar East catering to the mid income group consisting of 1/1.5/2 BHK units with modern amenities.

MILESTONE DOMESTIC SCHEME - III

ATS Dolce - Greater Noida, NCR

Location Sector Zeta 1, Greater Noida

Partner ATS Group

Invested Amount Rs. 98.5 Crores

Initial Investment Date November 2013

Total Saleable Area 2,414,410 sq ft (approximately)

Expected Rate of Return 23% IRR

Expected Exit Date Q2 2017

Recent Developments and Way Forward

Construction is in full swing and foundation work has been completed for all the seven towers of Phase 1. Currently these seven towers are at various development stages from completion of upper basement slab to completion of second floor slab.

Company has sold approx. 850,000 sq. ft till March 2015, which is more than 35% of the total saleable area.

Company has obtained construction finance from HDFC Limited for providing us partial exit and for meeting development costs of the Project.

The Fund has successfully exited the First tranche investment of Rs 65.0 crores at an IRR of 23.0%. The total redemption proceeds from the exit is approx. Rs 74.9 crores. This redemption proceed is in addition to the coupon of Rs 9.8 crores received earlier

Transaction Overview

The Fund has invested Rs 98.5 crores in Domus Greens Private Limited, an SPV of the ATS group in two tranches of Rs. 65 crores (in November 2013) and Rs. 33.5 crores (in Novemeber 2014).

Company is developing a mid residential project ‘ATS Dolce’ in Sector Zeta – I, Greater Noida. consisting of 2 and 3 BHK units with all modern amenities. The project consists of 13 towers of 26 - 29 floors each and 14 independent row houses. The Project is being executed in two phases of 1.3 and 1.1 million sq. ft.

Belfort - Pondicherry

Location Pondicherry

Partner Pelican Group

Invested Amount Rs. 15.0 Crores

Initial Investment Date March 2015

Total Saleable Area 850,000 sq ft (approximately)

Expected Rate of Return 22.50% IRR

Expected Exit Date Q1 2017

Project Status

For the developmement of senior living component, Pelican Realty has entered into an agreement for 50% of plots with Serene Senior Living. The senior living component is being developed as an integrated mini township with amenities/facilities for senior citizens.

The project has already been launched and out of a total of 745 plots, 411 plots have been sold till date, which is ~55% of the total saleable area.

Transaction Overview

The Fund has invested Rs. 15.0 crores in Pelican Realty Projects Pvt. Ltd (Pelican Realty) for development of a senior living and an affordable housing project. The project is spread over 52 acres in Bahour, Pondicherry.

Pelican Realty is a reputed developer in Tamil Nadu/Pondicherry and has also developed projects in locations such as Trichy, Chennai, Madurai & Kodaikanal.

The Fund has invested through Optionally Fully Convertible Debentures (OFCDs) and has an exclusive first mortage of land of ~8.5 lakhs sq.ft along with first charge on receivables of this area. The Fund also has personal guarantee of promoters and pledge of 99% shares of Pelican Realty.

MILESTONE DOMESTIC SCHEME - III

For Queries Contact: info@milestonecapital.in OR Call CAMS : +91 44 2831 7190 / 92, 3040 7190 / 92

Write to: Computer Age Management Services Pvt. Ltd. (CAMS) Unit : Milestone. No.178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai - 600 034

Disclaimer: The contents of this bulletin is for information purpose only and should not be construed as advice, representation or warranties from Milestone

Group. Milestone Group will not be liable for any loss or damage whatsoever arising as a result of any person acting or refraining from acting in reliance on

any information contained therein or anything stated or omitted to be stated herein or for any other reason whatsoever. Milestone Group accepts no liability

for any errors, misprints, inaccuracy or omission in this publication.

602, Hallmark Business Plaza, Sant Dhyaneshwar Marg, Opp. Guru Nanak HospitalBandra (East), Mumbai - 400051. India.

email: info@milestonecapital.in, website: www.milestonecapital.in

MILESTONE CAPITAL ADVISORS LIMITED

MILESTONE DOMESTIC SCHEME - III